The Long Term Development Plan
The NZDF Long Term Development Plan (LTDP) is approved by Cabinet each year. The LTDP is a planning tool which matches NZDF needs and cash flows with the Government’s Defence policy. Of itself, the LTDP does nothing except improve planning and forecasting. It does not change the required approval processes or procurement practices.
The Capital Programmes
Capital Procurement (procurement projects over $7 million) is managed for the NZDF by the Ministry of Defence (MoD). The MoD and the NZDF follow the same procurement rules, but MOD projects tend to be much larger than those of the NZDF. The exception to this rule is that building work and most real estate projects are managed by the NZDF
Minor Capital Projects, defined as projects valued at less that $7 million total project cost, are managed by the Services.
The Joint Logistic Support Organisation (JLSO)
The JLSO is the "provider of shared services" to the NZDF. In simple terms, anything that is common to two or more parts of the NZDF is likely to fall into the province of the JLSO. This includes management of prime contracts and develop procurement processes which can avoid the duplication which is inherent in many of the current processes.
In an effort to keep warehousing and related supply management costs down, the NZDF has entered into prime vendoring arrangements with suppliers of small value, fast moving goods. For example, all stationery is bought from a single supplier, with delivery direct to the end user wherever they may be located.
Single Service Procurement
Each of the three Services has a similar approach to procurement of small equipment items and consumables. All Services are placing increasing emphasis on “direct supply to users” rather than central stockholding for consumable and readily available items. Much single service procurement of nonspecialist items is now carried out by the JLSO.
When field exercises are carried out at remote locations considerable use is usually made of the resources of local communities. This may include the supply of fresh foods and fuels, and services such as rubbish removal.
Some areas of procurement are given special treatment:
- The RNZN, being located in a single geographic area at Devonport, has a single supply point, the Naval Supply Depot, which procures the diverse range of supplies required to support the fleet at sea and most items for the Naval Base. The ships obviously replenish their own needs while away from their base. Often this will involve working with local providores, or may utilise existing period contracts for, say, fuels.
- The NZ Army centralises procurement and maintenance of many operational items through the Logistic Executive based at Trentham. It procures a great deal of material on an as required or “just in time” basis, and supports units in the field anywhere in the world. Serco Project Engineering Ltd, based in Trentham Camp provides depot level warehousing and engineering services to the Army.
- The Army local procurement infrastructure provides the goods and services required to maintain individual camps, although increasingly this will be carried out by a local representative of the JLSO. This is likely to make little difference to the supplier.
- The RNZAF has a single point of procurement, at RNZAF Base Auckland, for goods and services.
- For the sake of efficiency, to benefit from economies of scale or to maximise the use of particular expertise, certain items are purchased and managed by one Service on behalf of two or all three. The Army, for example, manages most small arms for the NZDF. Consequently, an approach to the RNZAF by a prospective supplier of , say, ammunition may be redirected to another Service.
- In some cases procurement is managed for the NZDF by suppliers as part of an outsourcing contract. Similarly, contractors such as facilities managers are often the procurement agency for items which they maintain. Therefore, potential suppliers will often be redirected out of the NZDF to such contractors.
- All Services use the resources of contract brokers where economies of scale or efficiencies in procurement can be achieved by such means. Brokers such as GSB Supplycorp and Serco Project Engineering Ltd, negotiate period contracts or standing offers for a wide range of commodities and services. When such contracts become due for renewal, they are normally advertised widely, but potential suppliers are advised to contact the brokers with information about their products or services.